5 Reasons Why Real Estate Is A Tricky Business In Panama
Buying Real Estate In Panama Is A Tricky Business
Panama is often touted as one of the best places to buy real estate. Aside from rising prices, there are some aspects of the real estate business that you must know before buying property in Panama.
1. Many “Brokers” Aren’t Really Brokers
The term “Real Estate Consultant” is a common one in Panama. When someone has this title it usually means the person is not a licenced real estate broker in Panama. For Panamanians to obtain a real estate licence, they must write a lengthy exam. For a foreigner to become licenced, they must have residency in the country for a number of years and also write the exam. Real Estate Consultants are legitimate as long as they are working under a licenced broker.
2. There Is No MLS
Unlike Canada and the US, there is no centralized database for all property listings in Panama. In order for a buyer to get a true sense of everything that is available in Panama, you must use various real estate companies or agents. Since most companies post their listings on their websites, most of your in depth research can be done at home before arriving in Panama. Narrow down your list of properties you want to see, with various agents.
3. Sellers Don’t Make It Easy
Some big developers make the process of purchasing a lot harder than it has to be. It can be difficult to get accurate prices, and often times there are two price lists – one for locals and one for foreigners. If you are considering buying a unit from a developer, ask if the price is the same for all clients. Customer service is not always the forte of developers either. Most developers now have staff on hand that speak English, but sometimes it can take numerous phone calls and emails before you get a response.
Buying real estate from the original owner can be tricky as well. It is pretty common in Panama for a local to see the interested buyer is a foreigner, and then increase the price. These sellers also list their properties with various real estate agencies, but at different prices.
4. Good Luck Getting Paid
Real estate agents often have a very hard time collecting commissions from land owners and developers. Sure, the agent isn’t the responsibility of the purchaser, but as a buyer, it is a nice gesture to ask if the agent was able to collect their commission. If they have not, a phone call to the seller or developer is a great way to show the agent you appreciate their help. Many real estate agents don’t earn a salary from the company they work for and survive solely on commission.
5. Timing Is Everything
Don’t be in a rush to buy something. Panama is a large country with a lot to offer. Spend as much time in the country as possible before deciding on a specific area. Once you have chosen a property, have a title search done to insure the property is actually owned by the person selling it. The process of signing a contract can be pretty quick if you are buying from a developer, but there are cases when it can takes months. It is a good idea to have a trustworthy lawyer look over the contract first. It may cost you a few extra dollars but can save you a lot of time and money if the lawyer discovers a problem in the contract.
By keeping these five items in mind when buying property in Panama, you will save yourself time and money. Remember, Panama is very different than North America and Europe, and so is the process of purchasing real estate.
| Written by Rebecca Tyre |  |
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Filed under: Living & Retirement, News, Real Estate on September 10th, 2008
Thank you for this piece.
Now, about #2, No MLS and #3 Sellers don’t make it easy. Hasn’t Panama had sufficient time to put together an MLS of some sort? We’re talking about a multi-billion dollar industry with hundreds of condo high-rises, beach projects, mountain resorts, etc., that are being marketed to an international clientele.
How does anyone buying in Panama really know that they are making a sound decision. For example, if there are 200 units in a brand new Panama City skyscraper, how do you know how many are for sale? Is half the building for sale by speculators (like what’s happening along Avenida Balboa)? What are their prices? Are sellers offering one price to locals and other prices to foreigners?
Is a condo really worth $3,000 or $5,000 a square meter if the banks are only lending at $1,200 a square meter? Is a condo really a steal at $250,000? What if there are 10 other identical units in the building priced at $200,000? Without an MLS, how would you ever know?
Or, how long has any particular unit been on the market? What was the original price? Is the unit one of those designated to pay the special assessment for the Cinta Costera? If the Seller and their agent tell you that there are “no taxes for 20 years” are they hiding their knowledge that unit owners may face $50,000 to $100,000 in special assessments?
If your unit has an ocean view today, will it tomorrow? Will another building go up in front of yours? Does the seller know that another building is going up that will block the ocean view? Will your $500,000 condo be worth $200,000 when that happens? Will some developer create a project of man-made islands right in front of your sexy Punta Pacifica loft and destroy your Pacific view forever?
I just don’t understand how any buyer can really make an informed decision in Panama, no matter how hard one tries. And, one day all buyers will become sellers. How will sellers in Panama effectively market their homes in the 21st century without an MLS?